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The team was founded in 1967 by the brothers Josef (August 7, 1939–August 31, 1978) and Herbert Schnitzer (b. June 5, 1941). Their stepfather Karl Lamm had a car repair shop and dealer business. The brothers started racing in 1962, and Josef Schnitzer won the 1966 German Championship in a BMW 2000ti. In 1968, both retired from active race driving to focus on the business and the race team.

In the 1970s, the Schnitzer's younger half-brothers Karl ("Charly") and Dieter Lamm joined the team, with Charly Lamm acting as team manager at the race tracks. In 1978, Josef Schnitzer died in an accident, and Herbert Schnitzer remained as the boss.

Apart from having the BMW dealership and Motorsport team based in Southern Germany's Bavaria, they also own a BMW tuning specialist concern in the far north near the border of Belgium and the Netherlands, in Aachen. As this city has the license plate code AC, they called this branch AC Schnitzer.

In 1977 and 1978 Schnitzer tried to take on the mighty Porsche 935 in the DRM. They developed a Group 5, 560 PS (412 kW) turbocharged silhouette version of the RA40 Toyota Celica and raced it with modest success. The best finish of the Celica LB Turbo was a fourth at Nürburgring in 1977, but with dismal reliability the next year Schnitzer withdrew and returned their focus to BMWs.[1]